First Federal Sav. and Loan Ass'n of San Antonio v. Ritenour

• Decision Date: 16 January 1986
• Docket Number: No. 13-85-301-CV,13-85-301-CV
• Citation: 704 S.W.2d 895
• Parties: FIRST FEDERAL SAVINGS & LOAN ASSOCIATION OF SAN ANTONIO, Texas, Appellant, v. C.G. RITENOUR, et ux., Appellees.
• Court: Texas Court of Appeals

Page 895

704 S.W.2d 895

FIRST FEDERAL SAVINGS & LOAN ASSOCIATION OF SAN ANTONIO Texas, Appellant, v. C.G. RITENOUR, et ux., Appellees.

No. 13-85-301-CV.

Court of Appeals of Texas Corpus Christi.

January 16, 1986.

Rehearing Denied Jan. 30 and Feb. 20, 1986.

Wm. C. Church, Jr., Kampmann & Church, Miles Buttery, San Antonio, for appellant.

Thomas C. Hall, John C. Blanton, Stephen C. Caspers, San Antonio, for appellees.

Before UTTER, KENNEDY and SEERDEN, JJ.

OPINION

UTTER, Justice.

Appellant, First Federal Savings & Loan Association of San Antonio (First Federal), appeals from a jury verdict and judgment entered by the trial court pursuant to the Texas Deceptive Trade Practices Act (DTPA). ¹

Appellee and his wife (Intervenor) purchased a six month certificate of deposit from First Federal on December 12, 1980. This certificate of deposit was renewed on June 12, 1981. Both certificates of deposit were issued to Mr. or Mrs. C.G. Ritenour, jointly.

On August 3, 1981, appellee went to an employee of First Federal to discuss a personal matter which he felt affected the couple's funds on deposit at First Federal. He informed the employee that he wished to prevent his wife from withdrawing funds without his prior approval. Appellee was advised that a "hold" could be placed on the account which would require both of their signatures to make a withdrawal.

After the execution of the "hold," Intervenor, acting alone, withdrew $1,400.00, pledged the certificate of deposit as collateral for a loan of $3,000.00 and subsequently, after $3,000.00 was applied to pay off the $3,000.00 loan, withdrew the balance of the certificate of deposit, $6,815.96, in the form of a cashier's check payable to Mr. and Mrs. C.G. Ritenour. The total amount dissipated by Intervenor was $11,215.96.

Upon learning of First Federal's failure to comply with the "hold," appellee filed this lawsuit alleging that First Federal had violated the DTPA by representing to him that a "hold" could be placed on the certificate of deposit account. Mrs. Ritenour entered the lawsuit as an Intervenor and First Federal filed a "cross-claim" against her and appellee, seeking indemnity from the community estate of appellee and Intervenor. Thereafter, First Federal filed a third party action against Mercantile Bank & Trust (Mercantile), the bank in which Intervenor deposited the $6,815.96 cashier's check. Mercantile was granted a summary judgment which was severed into a separate cause.

The jury found that (1) First Federal's representation that the "hold" would require both signatures was a false, misleading or deceptive act, (2) that the misrepresentation was a producing cause of appellee's damages, and (3) that the misrepresentation was committed knowingly. The jury found that appellee had suffered actual damages of $11,215.96.

The trial court awarded appellee an additional $2,000.00 as provided for by the jury verdict and § 17.50(b)(1) of the TEX. BUS. & COMM. CODE ANN. The trial court further entered a judgment for First Federal in the amount of $11,215.96 against Intervenor and also ordered that the two judgments "shall not be offset...."

Whether or not a plaintiff is a "consumer" under the DTPA is a question of law to be determined by the trial court from the evidence. The trial court will not submit issues to the jury as to violations of the DTPA if it has determined that the plaintiff is not a consumer. Reed v. Israel National Oil Company, Ltd., 681 S.W.2d 228 (Tex.App.--Houston [1st Dist.] 1984, no writ); Ridco, Inc. v. Sexton, 623 S.W.2d 792 (Tex.App.--Fort Worth 1981, no writ). In the instant case, the trial court did submit issues as to violations of the DTPA, therefore, it can be presumed that the trial court determined that appellee was a consumer under the Act.

In its first point of error, First Federal contends that the trial court erred in entering a judgment under the DTPA because appellee was not a "consumer" as defined in the Act.

In order to prevail on an action brought under the DTPA, one must be a "consumer." Kennedy v. Sale, 689 S.W.2d 890 (Tex.1985); Riverside National Bank v. Lewis, 603 S.W.2d 169 (Tex.1980). The Act defines "consumer" as "an individual ... who seeks or acquires by purchase or lease, any goods or services...." TEX. BUS. & COMM. CODE ANN. § 17.45(4) (Vernon Supp.1985); Riverside National Bank v. Lewis, 603 S.W.2d at 175-76.

The Supreme Court in Riverside defined "service" in the context of the DTPA as follows:

'action or use that furthers some end or purpose: conduct or performance that assists or benefits someone or something: deeds useful or instrumental toward some object.' This definition described 'services' in terms of 'action,' 'conduct,' 'performance' and 'deeds.' All of these synonyms demonstrate that services includes an activity on behalf of one party by another.

Riverside National Bank v. Lewis, 603 S.W.2d at 174.

Appellee contends that he was a consumer because he sought or acquired by lease or purchase "a full range of services" when he purchased the certificate of deposit from First Federal and when First Federal represented that it had placed a "hold" on the certificate of deposit account, it was providing a collateral service incidental to the certificate of deposit.

In First State Bank, Morton v. Chesshir, 613 S.W.2d 61 (Tex.Civ.App.--Amarillo 1981), rev'd. on other grounds, 620 S.W.2d 101 (Tex.1981) (reversed and remanded to the Court of Appeals to hear conversion claim), on remand, 634 S.W.2d 742 (Tex.App.--Amarillo 1982, writ ref'd. n.r.e.), plaintiffs purchased a certificate of deposit from defendant First State Bank, Morton. They pledged their certificate of deposit as collateral for a loan for their son. When their son defaulted on the loan, the bank cashed in the certificate of deposit and applied it to the delinquent loan. Plaintiffs brought a DTPA cause of action against the bank. They contended that they were consumers because "their purchasing of the certificate of deposit was a purchase of services from the bank." First State Bank, Morton v. Chesshir, 613 S.W.2d at 62. In holding that they were not consumers under the Act, the court stated that the mere purchase of a certificate of deposit is seeking "only money to be paid in the future." The court went on to say: "money is not 'goods' as defined by the DTPA, and the attempt to acquire money is not an attempt to acquire services as defined by the DTPA." The court concluded by stating:

Accordingly, the Chesshirs did not seek or acquire either goods or services as defined by the DTPA in the certificate of deposit transaction and, thereby, were not consumers who could bring an action under ... the DTPA.

First State Bank, Morton v. Chesshir, 613 S.W.2d at 62, 63.

However, the court did note that:

the Chesshirs do not contend that they sought or acquired, or that the bank provided, any other services in the transaction.

Id. at 62, fn. 3.

This is precisely what appellee contends in the case before us. Therefore, we must decide whether appellee purchased any services from First Federal when he purchased the certificate of deposit.

Although in Riverside National Bank v. Lewis, the Supreme Court held that an attempt to acquire money is not an attempt to acquire services as contemplated by the DTPA, Riverside at 175, they made the following comments:

The argument that services existed in the lending of money, and in the process of determining whether to lend money, and were necessarily a part of the interest rate or purchase price of the loan, is not supported by the evidence adduced at trial. This argument, contained in the briefs, is merely hypothetical. There is nothing to support it in the Statement of Facts.

Additionally, Lewis' sole complaint about the transaction concerned the Bank's failure to make him the loan. He has made no complaint concerning the quality of these collateral activities that he now claims constitute a service. In the absence of a claim concerning these collateral activities, we hold that Lewis did not seek either "goods orservices" as defined under the DTPA.5

* * *

* * *

Riverside National Bank v. Lewis, 603 S.W.2d at 175.

There is evidence in the record which supports appellee's contention that he purchased services from First Federal when he purchased the certificate of deposit. Mr. Woodie Goodspeed, manager of the Savings Division and designated corporate representative of First Federal, testified that First Federal offers a broad range of services to the public, paid for out of profits made from depositors such as appellee. He stated that First Federal has a customer service department set up to handle problems with customers' savings accounts. He also agreed that the profits made by First Federal go to pay for such services as rendered to appellee. ² There is no testimony in the record that appellee paid an additional fee for such counseling and advice which was given him. Therefore it follows that the need for such services for its customers was contemplated by First Federal by instituting a customer service department. This service became available to appellee and intervenor when they purchased the certificate of deposit from First Federal. The counseling and advice was available to customers of First Federal whether it was needed or not. In this instance, appellee needed the service of advice and counseling provided by First Federal to its customers. In addition to providing the service of advice and counseling to appellee, First Federal attempted to provide appellee a service which they could not legally provide, i.e., the placing of a "hold" on the joint account of appellee and intervenor.

We therefore hold that appellee purchased financial counseling services, collateral to the certificate of deposit, from First Federal at the time the certificate of deposit was acquired. See La Sara Grain v. First National Bank of Mercedes, 673 S.W.2d 558 (Tex.1984); see also Fortner v. Fannin...